A common denominator market based financial system like that of the United States and England, and bank-based financial system like the German or French is the protection of investors. United States that have market-based system because the economy is very dependent on the value of property and financial assets. Therefore, most of the stock market and bond market is to create a great company and attract investors from all over the world. Presupposes that this stock market and individual (as investors) to play an important role in managing the significant financial and large number of individuals who held portfolios in the equity market. Ryan, equity financing is done in this system.

On the other hand, bank-based system characterized by a financial asset held by most financial institutions include banks, mutual funds, insurance companies, pension funds and others. This means the direct equity investment while the individual is a small investment in the large deposits, insurance policy, pension and mutual funds etc. Debt financing mainly from the bank, not the stock so the stock market and the market is relatively small and insignificant this type of economic system. The fact that, in market-based financial system, investors, property rights are protected because of good market shares and bonds and the percentage is significantly higher resulting from the GDP. For example, in 2003, financial assets is approximately 327% of GDP for the United States and 306% for the Indonesian market-based financial system dominant compared with 192% in Europe, 267% in a Japanese bank-based systems tend to be sophisticated, an example of the socialist system [1).

Main stock market size in terms of number of listed companies, aggregate market value relative to GDP and the initial public offering (IPO) with the number of population inversion is the confidence of investors and the quality of law on the market. Conversely, lack of protection of the rights of integrity and minimize the size of the market, as seen in the country with a value of bank-based financial system. Even with the market-based system in which shareholders and creditors of the market is also protected by law, political trends and government policy changes that can disrupt the smooth running market. There is a tendency for government to collect more power and control in the implementation of the law on the market at the time of deep economic recession.

Case in point is the financial market crash in 1929 which was followed by the distribution and ownership of the Great depression. However, many laws must be enforced to ensure the protection of investors, an expansion of the government’s market can be very ambitious in addition to reducing the efficiency of the market. That is why it is the obligation on the Federal government to check the amount of critical resources and seek to reform the market to avoid the rippling effect of the market indefensible. It is important to the market that are not efficient, especially coming from competition and lower capital gains, there is no insulation from political influence on investment decisions and operations. Privatization and the market is that unity should be allowed to operate in some degree of freedom for the efficiency and profitability. Reform is needed to ensure investor protection and confidence in the second reform is still very strong, if not carefully can be a negative impact on the market.